The House’s proposed $3.7 trillion tax bill isn’t what sparked that Moody’s downgrade — it was the runaway growth of entitlement spending.
The wise minds at Moody’s Investors Service finally acknowledged last week what the other two main credit rating agencies did years ago: America has a debt problem. Now it’s time for America to recognize that solving its debt problem will require addressing another hard truth: Americans have a retirement problem — specifically, they retire too soon.
Despite reports that Moody’s decision is related to the fiscal impact of the $3.7 trillion tax legislation the House is currently debating, that bill is just the proverbial rearranging of deck chairs on the Titanic. The biggest source of America’s long-term debt problem, which is not even included in the 10-year budget projections, is unfunded entitlements, largely Social Security and Medicare.
Continue reading the entire piece here at Bloomberg Opinion (paywall)
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Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.
Photo by Catherine Delahaye/Getty Images
